With links to articles for details and action-items for making moves.

Registering your business as an LLC or Corporation comes with some significant benefits, including:

Limited Liability — Avoid personal liability for debts or lawsuits incurred by your company. This benefit is very important as it protects your personal assets from business liabilities.

Tax Benefits — Enjoy better taxation options. Check with an accountant about the best taxation options for your business.

Equity / Stock — Use the stock or equity in your company to leverage employees, business partners, and investors.

COMMON ENTITY TYPES

Consult with your attorney and accountant to determine the best entity for your business. Some common entity types include:

LIMITED LIABILITY COMPANY (LLC)

A popular choice for many businesses as they offer the most flexibility and least amount of formalities. LLCs can have unlimited owners and different classes of ownership, so they can be suitable for simple or complex business structures. Owners can choose how they want the LLC to be taxed (i.e. as a sole proprietor, partnership, or S-Corp). LLCs also have the least amount of formalities required to upkeep and maintain the business. However, depending on your goals, an S-Corp or C-Corp may be a better option in some instances.

CORPORATION (S-CORP)

Generally good for small companies with just a few owners that do not need a complex business structure. They have “pass-through” taxation, meaning there isn’t a Federal tax on the company’s profits. Business owners only get taxed once when they pay themselves from the company. S-Corps only have one class of stock, so they are not ideal for complex business structures. CPAs sometimes recommend businesses be formed as an S-Corp instead of an LLC for tax purposes.

CORPORATION (C-CORP)

Generally good for companies seeking venture capital or looking to go public. Can have unlimited shareholders and different classes of stock (i.e. common stock and preferred stock). C-Corps are subject to double-taxation, meaning the company gets taxed on profits and the owners also get taxed when they get paid. Venture capital investors often prefer investing in a C-Corp over an LLC.

BENEFIT CORP / B-CORP

If your venture serves a social or environmental good, you can consider forming Benefit Corp or obtaining a B-Corp certificate. A Benefit Cop will grant you legal rights to take into account non-financial considerations in your business decision making, including the interests of your shareholders, workers, the community, and the environment. The B-Corp certificate is a stamp of approval that shows the public that you meet certain standards of social and environmental performance.

SOLE PROPRIETOR / GENERAL PARTNERSHIP

This when you do business as an individual (sole proprietor) or with a group of individuals (general partnership) without forming an LLC, Corporation, or other legal entity. You will not enjoy the benefits listed above. There is no limited liability protection. If anything goes wrong, your personal assets are at risk. This May be ok for low income, low risk, ventures if you are willing to tolerate the risk involved. Can get insurance to limit risk exposure. Still need necessary licenses and permits.

This guide is for informational purposes only and is not legal advice. Please contact us for professional assistance.

LICENSES & PERMITS

Every business needs to follow a few basic steps to legally operate.Below are some of the most common licenses and permits to consider:

LOCAL BUSINESS LICENSE

Most cities require you to register a business license and they may tax your business once you reach certain income levels (i.e. $100k year). You can generally register online on your own. For example, if you operate in the city of Los Angeles or San Francisco, you can register here:

SELLER'S PERMIT

If you sell goods, you may need a seller’s permit from the state of California. If you don’t sell goods (i.e. you just provide services), you may be able to skip this step. You can read more about the requirements and registration here:

FICTITIOUS BUSINESS NAMES / DBA

If you are doing business using a name that is different than your name as an individual or different than the name of your LLC or Corporation (if you have one), then you may need to register a fictitious business name with your local county. This is also sometimes referred to as getting a “DBA” because you are “Doing Business As” a name different than your legal name. You can register your DBA with Los Angeles or San Francisco County below.Article: DBAs in a nut-shell.

Vetting your Trademarks: Prior to registration, it is important to ensure that your trademarks are not confusingly similar to any existing trademarks — especially with businesses that provide similar goods or services to you. Conflicting trademarks can cause issues with your trademark application or may lead to legal disputes in the future. We recommend professional assistance to properly vet your trademark.Article: How do I vet my trademark?

PATENTS

Registering your Patent: You must register your patent with the United States Patent Office in order to obtain exclusive rights to your invention. You will likely need professional assistance with the process.

TRADE SECRETS

Protect your Trade Secrets: There is no registration for trade secrets. To protect this intellectual property, you must keep them a secret. This can include keeping your trade secrets secure, sharing only on an “as-needed” basis, and using non disclosure agreements when the information is shared.

This guide is for informational purposes only and is not legal advice. Please contact us for professional assistance.

CONTRACTS

BUSINESS FORMATION AGREEMENTS

Collaborate effectively. If you are running your business with other partners or investors, you need to properly establish these relationships with well-drafted contracts.

DAY-TO-DAY TEMPLATES

Businesses often need the same types of contracts again and again for clients, employees, and other regular transactions. Get some well-drafted templates in place that meet the unique needs of your business. Common templates include:

Master Service Agreement / Client Engagement Letter

Have a professional contract ready for your clients that will outline your services, rates, timelines, limitations on your liability, and other important considerations.

Employee / Independent Contractor Agreement

Detail the terms of your relationship with your employees and independent contractors including pay, intellectual property ownership, and confidentiality.

Terms of Use / Privacy Policy

If you transact with your client or user base online through a website, application, or other software you should adopt appropriate terms of use and privacy policies which govern your relationship with your clients and users.

Distribution Agreement

Detail the terms of your distribution engagements with vendors and business partners, including orders, shipping, exclusivity, liability placement and other terms.

Licensing Agreement

Capitalize on your intellectual property with a customized licensing agreement.

Non Disclosure Agreement (NDA)

Protect your trade secrets and confidential information when you share it with workers and business partners.

CONTRACT REVIEW

As an entrepreneur, you will encounter lots of contracts from vendors, partners, employers, and other individuals and businesses. Understanding the terms of your contracts before signing is extremely important. Use professional legal services to review contracts, highlight questionable provisions, and negotiate the terms of your deal before signing.

This guide is for informational purposes only and is not legal advice. Please contact us for professional assistance.

Employment Counsel

EMPLOYMENT LAW

Get professional assistance to ensure you’re compliant with all rules and regulations governing your workers. Some common types of worker classifications and rules include:

Unpaid Interns — Must be an educational experience for the intern. Ideally they should be getting school credit. They cannot be hired instead of hiring other workers. If anything they should sometimes be a drain on your business due to the time you take to educate them.

Independent Contractors — Independent workers (1099) who provide goods and services with a higher level of autonomy from your business (i.e. you are their client). They are simply paid for their goods or services and are not subject to many of the requirements employers must abide by for employees. However, if you exert too much control in your relationship with the worker, the government may determine that they are an employee and you will be subject to normal rules for employers.

Employees — Company workers (W2) who you exert a higher level of control over. Requires that you abide by employer rules, including holding workers compensation insurance and paying appropriate taxes on wages.

This guide is for informational purposes only and is not legal advice. Please contact us for professional assistance.

DISPUTE RESOLUTION

Conflicts happen. You may run into issues with vendors, partners, workers, or other businesses. Use professional legal services to help advise on how best to handle the dispute — whether amicably, or through more aggressive legal means.

NEGOTIATION & DEMAND LETTERS

In any dispute, an attorney can help advise about all your available rights and remedies. If you can negotiate an amicable resolution with the other party, that may be the best outcome. However, if your initial negotiations aren't effective, sometimes a demand letter from your attorney can help get the other party to take the matter more seriously -- and hopefully to a resolution.

SMALL CLAIMS COURT

If you are unable to reach an amicable resolution and if your claim is for $10,000 or less, small claims court can be a great option. The process is relatively cheap and quick and if you are successful you can get a judgment in your favor. More information regarding how to file in Los Angeles and San Francisco County is linked below. An attorney can help advise about where to file your small-claim, what damages to seek, and how best to prepare your evidence for your court date.

LITIGATION

If you are unable to reach an amicable resolution and if your claim is for more than $10,000, then you may choose to resolve your matter through a formal lawsuit. Litigation can be rather time consuming and expensive, though it may be necessary in some instances. We highly recommend having a skilled litigation attorney advise and represent you in your matter.

This guide is for informational purposes only and is not legal advice. Please contact us for professional assistance.

ESTATE PLANNING

ESTATE PLANNING

An estate plan is a comprehensive package that includes a living trust and all attendant documents. This is important to protect your preferences for your treatment should you become sick or incapacitated and for the care of your minor children (if you have any) and the disbursement of your property should you pass away. Having an estate plan with a living trust is the best way to preserve your wishes and protect your family from an expensive and time consuming experience in the probate court.

PROBATE REPRESENTATION

If a family member passes away without a trust, then his or her estate must go through the probate court. If you have been named executor in the will or have been appointed by the court to administer the estate (if there is no will), then you will need an attorney to represent you in these proceedings. Note that attorneys fees in this case are set by statute and are taken out of the estate, rather than paid by you directly.

TRUST ADMINISTRATION

If a family member passes away with a trust, then the decedent's wishes, as laid out in the trust, will need to be followed. If you have been named as Trustee, then you will need an attorney to help administer the terms of the trust.